If you want to avoid probate, you need to plan ahead.
A lot of people are under the misconception that having a last will and testament avoids the matter of probate. This is not the case: a will actually must go through probate.
Here are the basics for how probate works:
Every state has a process in place for determining how an estate should be distributed after someone dies. If someone dies, they generally have some form of assets in their own name. Regardless of their having a will or not, those assets must enter probate. At that point:
- The probate judge determines whether or not the will is valid.
- A time frame for getting debts paid off can be set up.
- The judge determines how the assets should be distributed.
Even though a will may state who the executor of your estate will be and how your assets are to be distributed, it still requires a probate judge to make that transfer legal.
In the case of a living trust, you may be able to avoid probate altogether, if the trust is set up and funded properly. The critical difference between a living trust and a will is that a living trust is recognized as a legal entity that owns all of your assets.
Your estate doesn’t need to go through the probate process because with a trust, you have already designated your successor trustee. They have the legal right to transfer assets because they—like you—are only managing the assets. The title to the assets is held in the name of the living trust.
If you wish to avoid probate, you need to know these things if you want to save your family the ordeal of probate court. Learn more about the differences between wills and living trusts, as well as the probate process, by downloading my FREE estate planning and living trust program.
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